Who Gets To Keep the House in a Divorce?
The biggest point of contention when dividing up property during divorce usually involves the family home. Your home is not only the largest asset you likely own but also full of shared memories, making it an emotionally complex issue.
If a prenuptial agreement isn't in place, you and your spouse must decide what to do. Perhaps you want to keep the home, and they do, too. If you've lived in your house for a long time, you may be worried you won't have a place to live if you leave. While these concerns are valid, it's important to weigh your options and determine what's financially feasible before you make a hasty decision.
Does One Spouse Want the House?
If only one of you owns the home and you prefer to keep it this way, you can refer to your state's laws. Each state views marital property differently. For example, in New York, spouses can keep any property they bring into the marriage. If one partner owned and paid off the home before the marriage, the spouse who owns it is entitled to it. However, if the other spouse contributed to the house during the marriage, both spouses are partially entitled to the home. At this point, the asset may transition from separate to marital property.
What if You Want To Continue Sharing the Home?
Another option you may choose is to keep sharing the home jointly. This path looks different for each couple. You can continue living together in separate bedrooms or rotate in and out of the house if you have children. In fact, many couples who have minor children together choose to keep the family home and "nest." Nesting refers to parents rotating in and out of the house based on their custody schedule while the children stay in the home full-time. This arrangement prioritizes the children's stability and routine, which is crucial during a divorce.
An additional path forward if you're choosing to share the home is to turn it into a rental property and split the profits. This will avoid refinancing into a potentially higher interest rate mortgage and delay the issues regarding dividing the home. While this option works for some couples with an amicable divorce, it may not work out very well for those with a more contentious history, as they must remain business partners.
Can You Afford To Keep the House?
One of the most significant financial mistakes in a divorce is holding onto a home that's beyond your means. When considering whether to keep the property, it's crucial to factor in the actual cost of ownership and maintenance. Your mortgage, property taxes, homeowners insurance, and other hidden costs can quickly add up, potentially straining your budget. Sacrificing your rights to other assets to secure the house, only to find out later that you can't afford it, is a mistake.
Many couples decide to sell their home and move on, allowing them to make a clean break and a fresh start. In this case, you must hire a real estate agent specializing in divorce assets. Then, you will need to agree on the details, including the appropriate listing price, the lowest offer you are both willing to accept and whether to make repairs or upgrades to the property. After you sell the home, you can use the cash profits of the sale to settle on other physical assets and property (such as giving your ex sole ownership of the boat in exchange for more cash from the home sale).
Coming to an Agreement on the Home
If you and your spouse have difficulties agreeing on what to do with your house, you can go to court and let a judge decide. However, if there is any way you can both come together and calmly discuss your options, then it is in your best interest to do so. Court cases take time and money, which are resources you should spend working on building your new separate lives.
One way to handle the decision is to meet with a divorce mediator. A divorce mediator is a neutral third party who can facilitate your discussions so you can weigh your options and reach a decision you both agree on. Working with a mediator gives you the tools you need to collaborate and reach a solution.
Haas Mediation can help you and your partner peacefully navigate divorce to avoid the combativeness of court. Whether you have some of the details of your divorce worked out or need some help to get started, our mediation services focus on helping you and your partner come up with workable solutions for an easier path forward. Give us a call today for a free 15-minute consultation.
